Climate change governance: action, not words, will support the greatest reallocation of capital in history as we move to net zero

In this article Maria Brookes discusses the shift of priorities in regards to climate change since the G7 summit.

When the G7 met in Cornwall on 11-13 June this year, the UK briefly enjoyed the full glare of global attention. And small wonder - it was an event of several milestones. The first appearance of the new US President as part of the G7, the first opportunity for global leaders to come together since the unwanted arrival of Covid-19, and with the host nation the first major economy to commit to achieving net zero carbon emissions by 2050, this felt significant.

It is no coincidence that the leaders of Canada, France, Germany, Italy, Japan, UK and the USA were gathered together in the Cornish resort of Carbis Bay. The Government’s ambitious Ten Point Plan for a Green Industrial Revolution is set to play a significant part in its ‘levelling up’ agenda, and as Cornwall is seen as central to the UK’s green technology sector, one can safely assume that the choice of location was to enable the UK Government to showcase the country’s green credentials. Happily, the weather played ball and images of Mssrs Biden, Merkel and Macron bathed in Cornish sunshine will undoubtedly have given a welcome boost to the Cornish Tourist Board.

But this was more than just a show for the media. Promises have been made before in relation to tackling the climate crisis, only subsequently to be broken. Prince Charles, long known for his defence of the environment, used his speech at Cornwall’s Eden Project to urge G7 leaders to tackle climate change with the same urgency that they have tackled the coronavirus pandemic. Referring to the pandemic as a ‘truly borderless crisis’, he made it clear that climate change and biodiversity loss are also a borderless crisis, ‘the solutions to which have been argued about and postponed for far too long.’ The response to the pandemic, he added, provided ‘a crystal-clear example of the scale, and sheer speed, at which the global community can tackle crises when we combine political will with business ingenuity and public mobilisation.’

The next big waypoint on the issue, and a test for the UK’s aspirations to take a lead, will come in November when Glasgow will play host to the 26th UN Climate Change Conference of the Parties (COP26). The COP26 summit will bring parties together in a bid to accelerate action towards meeting the goals of the Paris Agreement and the UN Framework Convention on Climate Change.

Before then, the need for action, not words, is something that the CBI reinforced in mid-June in its Road to Net Zero conference. So many of the business leaders who spoke at that conference were clear on the point that business will mobilise to enable the Green Industrial Revolution, but they require clear Government policy to underpin those efforts, as well as global commitments so that green investment can flow into countries like the UK.

At the conference, business change, consumer change and capital markets change were all flagged as important components. A collective approach by governments, business and consumers was seen as the only way that the world will truly achieve success in relation to climate action. Many speakers called for global standards to allow businesses to operate across borders. They want regulation to allow consumers to make different choices, and commitments to infrastructure across the globe.

Many businesses are doing great things already, with sustainable, inclusive growth the model for many. Governance professionals have a vital role to play in helping boards to turn into reality the Government’s plans to create and support up to 250,000 green jobs in things like hydrogen production and carbon capture. By ensuring that boards are doing all that they can to give climate change the appropriate attention throughout their entire organisation, they can help to drive the empowerment, innovation and resilience that is required.

A workshop session, ‘The governance of climate change’ will take place at Governance 2021 on 7 July at 09.40. The discussion will probe the challenges of ESG and climate change for boards generally, and for governance professionals in particular.

Maria Brookes, Media Relations Manager, The Chartered Governance Institute UK & Ireland

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